# In the matter of harvest Hotels and Serviced Apartments Pvt. Ltd. CP (IB)-144 (PB)-2022

> NCLT judgment dated 2022-10-07. Citation: TCN-2022-NCLT-00826. Asset Reconstruction Company (India) Limited ('ARCIL') filed an application under Section 7 of…

- **Court:** NCLT
- **Order date:** 7 Oct 2022
- **Citation:** TCN-2022-NCLT-00826
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/harvest-hotels-and-serviced-apartments-pvt-ltd-cp-ib-144-pb-2022-69a5dbc0

## Summary

### Background

Asset Reconstruction Company (India) Limited ('ARCIL') filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Harvest Hotels and Serviced Apartments Pvt. Ltd. The application was based on a default in repayment of Rs. 187,48,33,568. The Corporate Debtor's loan accounts were classified as NPA by the assignor banks (State Bank of India, Central Bank of India, and Allahabad Bank) on various dates. ARCIL is the assignee of the financial debt from these banks. An earlier CIRP initiated by Central Bank of India against the Corporate Debtor was withdrawn after ARCIL acquired the debt and the CoC resolved to withdraw the CIRP based on an undertaking by the Corporate Debtor

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## Facts

Asset Reconstruction Company (India) Limited (ARCIL) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against Harvest Hotels and Serviced Apartments Pvt. Ltd. (Corporate Debtor) due to a default of Rs. 187,48,33,568. The Corporate Debtor's loan accounts were initially with State Bank of India, Central Bank of India, and Allahabad Bank (Assignor Banks), who had granted financial assistance. Due to non-repayment, the accounts were classified as Non-Performing Assets (NPA). The Assignor Banks entered into a Master Restructuring Agreement (MRA) with the Corporate Debtor on December 29, 2014, restructuring the debt, which amounted to INR 101.25 crores. Central Bank of India had

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## Issues and analysis

### Issue 1: Whether the application filed by Asset Reconstruction Company (India) Limited under Section 7 of …

**Ratio:** The Adjudicating Authority has the power to admit an application under Section 7 of the

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**Reasoning:** The Corporate Debtor admitted the debt and default. The Adjudicating Authority considered

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**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a

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**Application:** The Corporate Debtor admitted the debt and default. The application was

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## Parties

- **Judges:** Ramalingam…; AVINASH K.…
- **Appellants:** Asset Reconstructi…
- **Respondents:** Harvest Hotels…

## Timeline

- **2014-12-29 — Master Restructuring…**: Assignor Banks entered into a Master…
- **2019-03-01 — Admission o…**: Central Bank of India's application for CIRP…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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